“The Poor’ Savings Fund”: Developing Microfinance for The Urban Poor, A Case Study of Amphoe Muang, Amnat Charoen

Abstract

This research article examines the problem of microfinance access for poor households in Amnat Charoen municipality. Also, it presents the development of a microfinance model, especially microsavings that is appropriate and conducive to accessibility of the poor by using the concept of the poor economy, microfinance, and microsaving. This study used a combination of qualitative research, quantitative research, and participatory action research. The researcher found that the design of microfinance services did not take into account the context of the poor because they were not truely regarded as the main target. As a result, the majority of the poor are unable to access these services, are stigmatized, and are deprived of social services and benefits. In addition, there is a common myth that the poor cannot save, have no potential to save, or don’t want to save. This leads to the design of microfinance services that do not correspond to the context of the poor from the outset. In fact, the poor can save, and saving is the first service that the poor need. Therefore, appropriate microfinance models for the poor should take into account the limitations, problems, and needs, while also adjusting to be consistent with the sociocultural conditions in each area and proceeding gradually. This allows the community to learn, trust, and accept different contexts of the poor, while making the poor accessible, responsive to the needs of the poor, and sustainable at the same time. However, providing services to the poor through mixed community financial organizations may have management restrictions, which may affect poor people’s savings and fund growth. On the other hand, it has specific characteristics that are conductive to long-term strengthening and sustainability.